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You are comparing, three mutual funds on the basis of their past performance so that you can pick one for your investment. You have the
You are comparing, three mutual funds on the basis of their past performance so that you can pick one for your investment. You have the fallowing information
Mutual fund | Observed return (%) | Beta | Residual Variance (%) | Beta of Equal Variance Funds |
A | 30 | 1.3 | 9 | 1.55 |
B | 22 | 1.2 | 11 | 1.70 |
C | 15 | 1.1 | 16 | 1.33 |
which mutual fund would you like to invest in if you measure their performances according to i) Sharpe's measure, 2) Jensen's measure, 3) Treynor's measures and Appraisal Ratio(Assuming Rf= 5% , Rm= 12% ,2m=18%)
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